PHILADELPHIA and SINGAPORE—BDP International, a global logistics and transportation management company, said this week it is establishing a Singapore-based global alliance of small- to mid-size firms to better compete with larger, multi-national logistics services providers

Dubbed Global Network Services, this alliance is comprised of BDP International, BDP joint ventures, BDP-owned companies and partner affiliates in more than 120 countries, including Japan, Saudi Arabia, Colombia, Ireland, and others, according to a company spokesperson.

BDP said that Global Network Services members will leverage various shared benefits and services, including technology, sales and marketing support in priority trade routes, competitive transportation products, and established operations in leading and emerging markets, among others.

"We think we have a unique business model that is right for the times," said BDP Executive Director of Marketing and Communications, Arnie Bornstein in an interview. "We believe we are offering a smart investment based on the dynamics of the logistics industry, and what we are trying to do is to bring [member] assets as well as our own to improve the ease of doing business and reducing transaction complexities…through a proven confederation of companies that operate as members."

Regarding what drove the need for BDP’s Global Network Services, Bornstein noted that it is primarily based on the needs of customers, in terms of where they are going, what they are doing, and what BDP is seeing for their current needs today and anticipated needs in the future.

Aside from customer needs, the ongoing consolidation in the logistics sector—which has been prevalent in recent years with several large-scale deals with some of the largest logistics service providers buying smaller companies—is a major driver of this initiative.

"What we have seen anecdotally is a steady decline in the quality of customer service throughout the logistics sector," said Bornstein. "The business models of the largest companies are more conducive to high volume, which is fine, but individual shippers still demand value as well as price."

Given those circumstances, he said BDP began seeing the "moment of truth" where a shipper becomes a little bit less patient and tired of being treated like a commodity rather than a customer. And subsequently BDP’s Global Network Services business model is driven by the need for more intensive customer service and a closer understanding of customer needs, which Bornstein said is more important than sheer size.

"This is not so much about competing with larger companies as it is about a dynamic of a logistics sector that has been consolidating in recent years," said Bornstein.

In terms of benefits for shippers, he noted that global shippers are operating in an environment where their need for customer service does not go away. And as shippers' businesses expand through factors like sourcing and emerging markets, as well as consumption in those emerging markets, the complexities of freight forwarding, customs brokerage, and transportation management do not go away," Bornstein explained. "The need for customer intimacy does not go away as supply chains globalize."

BDP expects to have approximately 30 members in its Global Network Services unit by the end of 2008.

Singapore-based: When asked why the Global Network Services unit will be based in Singapore, Bornstein offered up myriad reasons. Chief among them is the fact that Singapore is viewed as one of the world’s leading business hubs with one of the best technology infrastructures in the world. And he added that Singapore is geographically well-positioned to engage with both emerging economies and trade routes, in a competitive business environment with a highly skilled workforce.

By: Jeff Berman